Every Penny Counts

bigevil600 (sxc.hu)

bigevil600 (sxc.hu)

Little Ways to Save Big Money

Total Savings: $3,890 a Year

Frugality has become necessity for many Americans. The recent recession has drained retirement savings and left millions of people unemployed. That prompted Jeff Yeager, dubbed the Ultimate Cheapskate, to write How to Retire the Cheapskate Way. Here, his advice for anyone who wants to spend less. You may not be surprised by some of his tips, but you may be surprised by how much you can save…

SAVE ON DRIVING

Rent a car for high-mileage-driving days rather than driving your own.

SAVINGS: $50 a day.

The auto-rental industry has become very competitive in the past decade. It’s possible now to rent a car for $19 to $29 per day, sometimes even with unlimited mileage. That could be less than the cost of using your own vehicle on days when you do a lot of driving.

Example: If you pay $25 to rent an economy car that delivers 30 miles per gallon (mpg), then use it to drive 300 miles that you otherwise would have put on your own 20-mpg vehicle, you’ll save around $17.50 in gas (at $3.50 a gallon) and perhaps $60 in vehicle depreciation, for a net savings of more than $50. (The typical new car costs around $30,000 and provides perhaps 150,000 miles of service before the repair and maintenance bills start to add up, suggesting that cars depreciate at a rate of roughly 20 cents a mile, though this, of course, varies.)

Driving a rental brings peace of mind, too. If your rental car breaks down, the rental company will bring you a replacement. If your own car breaks down on a distant road, you will have to trust a mechanic you don’t know and arrange lodging and/or transport until the repairs are complete.

Shop around—rental rates vary dramatically among rental companies. Make sure that the rental comes with unlimited miles—or at least enough miles for your journey. Also make sure that your auto insurance or credit card provides rental-car coverage so that you can skip the rental company’s expensive coverage.

Tighten your gas cap until you hear a click.

SAVINGS: $160 a year.

That click means that the cap has sealed. Driving while the gas line isn’t properly sealed (or with the gas cap missing or broken) could reduce your fuel economy due to evaporation and other factors by as much as 10%. If you drive 12,000 miles a year in a 25-mpg vehicle, that could add up to as much as $160 in unnecessary annual gas bills.

SAVE ON WASHING CLOTHES

Wash clothes less often.

SAVINGS: $100 a year.

Americans wash their clothing more often than anyone else in the world. Naturally, clothes need to be washed if they’re dirty, stained or sweaty—and underwear and socks need to be washed with each use—but most garments can be worn several times before they require a trip to the laundry room. Simply air out clothing between wearings.

The typical load of laundry costs perhaps $1 in electricity and water bills (though this varies greatly depending on local electricity rates, the temperature of water used and other factors), so if cutting back on washing allows you to skip just two loads of laundry per week, you could save more than $100 per year.

Washing clothes less often also helps them last longer. Most of the wear and tear on garments occurs during washing and drying, not while the clothes are being worn. The longer your clothes last, the fewer new garments you must buy.

Use cold water when washing.

SAVINGS: Another $100 a year.

When you do wash clothes, do so in cold water unless the tag specifically recommends otherwise. Not only could this save you $100 or more in annual water-heating bills, it will further prolong the life of your clothing—hot water cooks fabrics, speeding their decline. Modern detergents work very well even in cold water.

Hang clothes outside on a line to dry, weather permitting.

SAVINGS: $100 to $200 year.

The total savings for the typical family can be $100 to $200 per year in electricity/operating costs of an electric dryer. This not only saves electricity, it extends a garment’s life. Dryers bake fabrics, which can shorten clothes’ useful life by as much as 50%.

Zip up garments before putting them through the washer or dryer.

SAVINGS: $30 a year.

Open zippers can abrade other garments during washing and drying. Even if zipping up zippers prevents significant damage to only one garment per year, that’s an annual savings of perhaps $30 or more, depending on the replacement cost of the garment.

SAVE ON YOUR CELL-PHONE BILL

See if cellular discounts are available through your employer or a nonprofit with which you volunteer.

SAVINGS: $150 a year.

The cellular provider that supplies cell-phone service to your employer might offer discounted rates to the company’s employees as well. Similar discounts sometimes are available to those who volunteer with nonprofits—they’re particularly common through volunteer fire departments. These discounts can be as much as 20% off standard rates. The typical individual’s annual cell-phone bill is now more than $850, so a 20% discount could easily save you in excess of $150 per year. Typically, any size company can qualify. Ask your employer’s benefits department for details, or check its cellular provider’s Web site.

Example: On VerizonWireless.com, select “Deals & Special Offers” from the menu near the bottom of the home page, then select “Employee Discounts” near the bottom of that page.

LOSE WEIGHT AND SAVE MONEY

Combine diets with savings plans to reach both goals.

SAVINGS: $200 a month.

Saving money and losing weight are two of the most common goals people have—and there is a way to make these two seemingly unrelated goals reinforce each other.

Every time you’re tempted to break your diet with a rich dessert, unhealthy snack, high-calorie specialty coffee drink or some other treat, instead jot down how much you would have spent on this belt-expanding indulgence. At the end of each day, put the money you saved in a jar or an envelope until you reach your target weight. This adds a financial incentive to the diet—and the savings really can add up. One woman who did this for a month saved nearly $200.

SAVE ON SERVICES

Shop for services when they’re out of season.

SAVINGS: 10% to 20% a year.

Many service industries have a busy time of week or year and a slack time. Savings of 10% to 20% or more sometimes are possible if you can wait for the slack time. That could add up to hundreds of dollars per year.

Examples: Tree-removal services and lawn mower repair shops often are short of business during the winter…auto mechanics sometimes lack sufficient business midweek…carpet-cleaning services tend to be very busy right before the holidays but in need of customers after the holiday season ends.

If a service provider doesn’t automatically offer a lower rate during his/her slack season, politely request one. Your odds of success are greatest if you present this request as an effort to help the service provider as well as yourself.

Example: “I’m not in a huge rush to get this work done, so tell me if there’s a particular time when you could fit me into your schedule in a way that lets you give me your best rate. I’d rather wait a while if it would save me some money.”

INSURANCE SAVINGS

Cancel no-longer-needed insurance.

SAVINGS: $3,000 a year.

When you no longer have dependents and/or earned income, you might no longer require life insurance or disability insurance. Eliminating these can save thousands of dollars a year.

Example: A 60-year-old man might be paying more than $3,000 a year for a $300,000 term-life insurance policy and a similar amount for a disability policy.

But talk with a financial adviser you trust to confirm that you no longer need insurance.

When you retire and no longer have a commute, you also might be able to save 10% or so on your auto insurance by informing your insurer that you now drive significantly fewer miles per year.

Source: Jeff Yeager, author of How to Retire the Cheapskate Way (Three Rivers). Based in Accokeek, Maryland, he is the official Savings Expert of AARP and founder of the Ultimate Cheapskate Web site. www.UltimateCheapskate.com

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